XRP Price Prediction: Will the Native Token of Ripple Labs Inc. (XRP) Recover From Its Recent Dip?

XRP, Ripple Labs' native token, is in a crucial make-or-break situation due to bearish market sentiment and a recent price decline.

The price of XRP, the native token of Ripple Labs, is in a crucial make-or-break situation as bearish market sentiment continues to put pressure on the asset, causing it to drop below a key support level.

At the time of writing, XRP is trading at $1.95, down 6% in the past 24 hours, according to data from CoinMarketCap.

XRP Technical Analysis and Its Key Levels

However, the XRP daily chart shows signs of price recovery and now appears to be rebounding. According to expert technical analysis, XRP’s daily chart is witnessing a bullish divergence, indicating a potential price recovery.

In the chart, while the asset’s price is making a lower low, XRP’s Relative Strength Index (RSI) has formed a higher high, suggesting that the asset is poised for a price recovery and an upside rally.

If XRP manages to stay above the critical support level of $1.95, it could continue its bullish momentum and test the next resistance at $2.38. A break above this level could open the door for XRP to rally towards $2.95, which represents a 40% price increase from the current price.

Despite a notable price decline in recent days, the asset still holds above the 200 Exponential Moving Average (EMA), indicating that it is in an uptrend.

If the bulls fail to maintain the price above the $1.95 support, the bears might take over and push the price down to test the next support at $1.54, which is the Fib 0.618 level.

If this support breaks, the bears could continue to exert pressure on the asset, aiming for the Fib 0.786 level at $1.08.

Chart Via TradingView

Bullish On-Chain Metrics

With continuous price fluctuations in recent days, whales and long-term holders have been accumulating tokens, as reported by the on-chain analytics firm Coinglass.

According to the latest data from spot inflow/outflow, exchanges have seen a significant outflow of $110 million worth of XRP tokens in the past 24 hours.

This indicates that whales or institutions are pulling their tokens off exchanges, which could be a bullish sign as it might decrease selling pressure and spark a further price uptrend.

The outflows could also be attributed to traders shifting their tokens to DeFi protocols or to cold storage for safekeeping.

$110 Million Worth of XRP Outflow

Furthermore, the outflows could also be linked to a recent surge in DeFi activity, with traders shifting their tokens to participate in yield-generating opportunities within DeFi protocols.

This shift in trader behavior could be a bullish indicator, suggesting a belief in the potential for continuing gains in the DeFi market.

Traders Bearish Outlook

Apart from this, intraday traders are currently over-leveraged at the $2.08 level, where traders betting on the long side have built $10.30 million worth of long positions.

Meanwhile, $2.136 is another over-leveraged level where traders betting on the short side have built $19 million worth of short positions.

This data shows that traders are following the current market sentiment and believe the price won’t rally above the $2.136 level.